Don’t Waste A Crisis

This cliche, which has uncertain attribution (Winston Churchill, Rahm Emmanuel, M. F. Weiner) is a priceless line that gets tossed out periodically, especially in the middle of a crisis.

Over the years I’ve been involved in many business crises. I qualify this, since my crises have never involved life and death or the survival of the human race. But they are still crises. Some have lasted moments while others have lasted months, and I can think of one that went on for three years – or at least took three years to dig out of.

I’ve only occasionally been in the CEO (or equivalent) role during a crisis. Most of the time I’m a board member or investor. As a result, I’ve participated in dealing with the crisis, but I’ve also been able to observe the behavior of the leader during the crisis. While I’ve had to go throw up in the bathroom after a particularly distressing conference call more than once, I’ve been fortunate to be able to be one level removed from the essence of the crisis.

A typical leader has a natural tendency is to be defensive in the face of a crisis. The first reaction is to blame someone – or something – else. Often the blame is aimed at something abstract or non-controllable, which often has nothing to do with the crisis, but is adjacent to whatever is going on so it’s an easy target. As soon as the blame is out there, the attack begins, which often causes others to be defensive, generating a vicious cycle of anger, hostility, frustration, and obfuscation at the beginning of the crisis.

Over time, I’ve learned that the best leaders take a completely different approach. When the crisis erupts, rather than immediately go into action, she pauses and takes a deep breath. She starts collecting data about what is happening. In parallel, she communicates the crisis to the key people who need to be involved – the board, the leadership team, and anyone specifically engaged in the crisis.

If the crisis lasts moments, rapid action is critical. But if it’s simply the beginning of a broader issue, especially one where the root cause isn’t known yet, the worst thing a leader can do is act immediately. As a teenager, my dad taught me about the idea of unintended consequences and I’ve had the experience, and how to deal with it, pounded into my soul over the years.

If you want to understand this better, I encourage you to read Charles Perrow’s classic book from 1984 – Normal Accidents: Living with High Risk Technologies. I often forget to mention it when asked which books have influenced me the most – Normal Accidents is in the top 10.

So, you are now in the crisis. As CEO, you feel an immense need to address whatever is causing the crisis and resolve it. But that’s only half of it. If all you do is focus on solving the crisis, you are missing the big opportunity, which is to learn from it and integrate it into the fabric of your company. It’s not that you won’t ever have a crisis again – you most certainly will. But if you can change the way your company functions in the context of a crisis in a positive way, you can actually get some value out of the crisis.